The responsibilities of health system directors are significant and increasing, and engagement is a major concern, which is why director compensation has become a hot—though controversial—topic for large health systems. While it isn’t yet widely accepted in the nonprofit sector and may be difficult to implement, compensation may be a critical talent development tool for director recruitment and retention, and a necessary step if health systems are going to survive within nonprofit ownership. Tim Cotter, Ralph DeJong and Michael Peregrine discuss where this director compensation headed in the health care sector.